So the tag is still a link, but it is a link to the tag page, which is the behavior it would have if the link to [2] didn't exist at all. The user's desired behavior in this case is... ambiguous, to be charitable.

EDIT 2:I briefly included markup from Firebug here, but it turned out to be irrelevant. It has now been removed to improve readability. See the revision history if you're interested.

2 Answers
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The <a>[tag:name]</a> generating bad html is mildly annoying, even if I don't really think its a valid use case. I've gone ahead and checked in a fix to dev (we just won't process the tag syntax if it appears in an anchor tag).

The [tag] [text] [index] is actually by design. The markdown spec allows a space between a link's text and its "index." Its kind of a goofy use case, but its in there.